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2017 (12) TMI 1191 - AT - Service TaxNon-payment of service tax - receipt of advance from their customer which were later adjusted against the bills received on completion of stages of the contract - liability of interest - Held that: - In case of Advance receipt from the customers, the amount was received by the assessee as security/ guarantee amount. It is obvious that for big contract which spread over years, the service provider needs to have specific performance guarantee from their customer. The assessee in turn of such security amount has issued Bank Guarantee amount to their customer. We find from the contract with Chettinand Cement Corporation Ltd.,produced by the Appellant that it provides for Advance cum security and in turn the assessee is liable for equal amount of Performance security bank Guarantee. Thus the amount is guarantee from both the sides. Such amount cannot be considered as advance receipt since it is normal feature of contracts. There is no doubt to our mind that the advance cum security bank guarantee to the assessee by the contract awarding party is in the form of earnest money. Thus the same is not liable to tax. It is also found from the certificate issued by the Chartered Accountant that the aseessee has discharged service tax liability on the entire amount of such advances. We thus find no reason to hold that the said amount is liable to be taxed at the time of receipt. Demand on retention money - Engineers sent abroad - export of service - Held that: - it is not in dispute that the services were rendered abroad. It is also not in dispute that the main contractor of the assessee received the consideration in foreign currency who in turn made payment to the assessee. In such case we find that the services rendered by the assessee falls under the Export of service which is eligible for exemption from service tax - assessee is not liable for payment of service tax on services rendered abroad. Appeal dismissed - decided against Revenue.
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